Long At The Top

Consumer confidence rose briskly with today’s report to the highest level in six years, since the last peak in 2007 before the intervening… unpleasantness. Obviously the pollees are seeing something most consumers are not, as the earlier report today on personal consumption showed a fall in consumer spending (and prices).

If one is paying attention, it is clear that Bernanke’s great experiment is failing to achieve its goals as deflationary pressures are more and more obvious. Falling consumer and commodity prices, together with flat incomes mean more than just disinflation. Next week we get the monthly employment report which won’t be pretty if Gallup’s polling is any guide.

Meanwhile, the Street is busting a gut persuading retail investors to get out of bonds and into stocks. After all, that is retail’s job – to hold the bag.

Edit: ECRI chimes in: “The bottom line: for all the talk of the wealth effect, demand is falling and deflation is closer than at any time since 2009.”

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